Citigroup to retrench 2,000 investment bankers and traders
20 Mar 2008
Mumbai: Citigroup plans to fire 2,000 investment bankers and traders by the end of the month, the New York Times had reported earlier today. The company plans to lay off over 5 per cent of its workforce at its securities unit, subsequent to record losses from the US subprime mortgage market failure.
Mortgage write downs have cleaned out almost half of Citigroup's market value since October, ensured that CEO Charles ''Chuck'' Prince lost his job, and made the company raise around $30 billion from outside investors.
In January, Citigroup had announced 4,200 job cuts, and curtailed year-end bonuses for top executives. The company had lost $18.1 billion in writedowns on subprime home loans and bonds.
The new CEO Vikram Pandit had announced an end-to-end expense review at the company, and consequently, more layoffs can be expected as the cost review progresses. ''When it comes to Citi, what you're going to see for the next year is layoffs,'' said Jeanne Branthover, managing director of Boyden Global Executive Search in New York, as quoted by Bloomberg.
Reuters reported that any job losses would be over and above the 4,200 cuts company-wide that had been announced in January by CEO Vikram Pandit, and the 17,000 layoffs announced last April by his Charles Prince.
Some analysts estimate 30,000 jobs losses at Citigroup before the clean up act starts to show. This time, job losses at Citi would be accompanied by similar actions at other investment firms, as companies counter and plan to recover from the impact of the mortgage crisis, and a slow down in the US economy. Citigroup lost 28 per cent of its market value this year on the New York Stock Exchange.
Even before the credit crisis hit around last summer, Citi had announced a staff reduction of a massive 17,000. The company has also closed down some branches across the US, including eight in Texas, six in Florida, three in New Jersey, one in California and one in Maryland.
